As promised, earnings reports for the March quarter show up this week before markets open on Wednesday morning. The next six to eight weeks will see an avalanche of reported results, and we’ll be previewing some of the most closely followed issues as they roll onto our calendar.

Neither Monday nor Tuesday of this week has any reports of special note, but there are three big U.S. banks reporting before markets open Wednesday morning, along with one specialty retailer whose fourth quarter ended in February.
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Goldman Sachs

Goldman Sachs Group Inc. (NYSE: GS) has posted a 12-month share price gain of nearly 85%, virtually all of it since November. For the year to date, the shares are up about 27%. The bank’s outstanding performance during the pandemic is down to its trading desk and its dealmaking. Investors seeking higher returns trade more, and private companies looking to soak up some homeless cash through IPOs and mergers have been boosting Goldman Sachs profits. While markets are a bit cooler now, there is little reason to think the boom is over.

Analysts’ ratings on the stock are mixed, with 10 of 27 ratings of Buy or Strong Buy, compared to 15 Hold ratings and two at Underperform. The consensus price target on the stock is $368.11, and shares traded Monday at around $333.75, implying a potential 12-month upside of around 10.2%. At the high target of $468, the upside potential reaches 40%.

Goldman Sachs is expected to report first-quarter earnings per share (EPS) of $10.22 on revenue of $12.39 billion. In the first quarter of last year, the company reported EPS of $3.11 and revenue of $8.74 billion. Estimates for the second-quarter call for EPS of $8.16 and revenue of $10.74 billion, compared to year-ago EPS of $0.53 and revenue of $10.74 billion. For the 2021 fiscal year, analysts are forecasting EPS of $32.92 and revenue of $42.6 billion, a year-over-year increase of 33% in EPS, and a revenue decrease of 4.4%.

The stock currently traded at around 10.1 times expected 2021 EPS, 10.0 times estimated 2022 EPS and 9.3 times estimated 2023 earnings. The stock’s 52-week range is $165.36 to $356.85, and Goldman Sachs pays an annual dividend of $5.00 (yield of 1.51%).

JPMorgan Chase & Co. (NYSE: JPM) has posted a share price gain of about 57% over the past 12 months. Like Goldman Sachs, essentially all the gain has come since November. Over the past 10 years, JPMorgan stock has added 340%, more than any of the other U.S. megabanks.

One difference between the two big banks is that JPMorgan’s provision for credit losses last year totaled $17.5 billion compared to Goldman Sachs’s total of $3.1 billion. The bank’s so-called fortress balance sheet contributed to an 8% increase in book value per share last year and a return on tangible common equity of 24%, both significantly better than 2019’s performance.

Of 28 analysts’ ratings on the shares, 13 are rated either Buy or Strong Buy and 13 are rated Hold.  The consensus price target is $161.74. With shares trading currently at around $156.25, the potential upside on the stock is 3.5%. At the high target of $187, the upside potential is 20%.

For the first quarter, analysts expect JPMorgan to report EPS of $3.07 on revenue of $30.52 billion. That’s a 287% jump in EPS on a revenue increase of 5%. Estimated second-quarter results call for EPS of $2.89 (up 109% year over year) on a 2.9% decline in revenue. For the full fiscal year, EPS is currently expected to rise 26.7% to $11.25, while revenue is forecast to decline by 4% to $118.07 billion.

The stock currently trades at around 14.1 times expected 2021 EPS, 13.3 times estimated 2022 EPS and 12.6 times estimated 2023 earnings. The stock’s 52-week range is $82.40 to $161.69, and JPMorgan pays an annual dividend of $3.60 (yield of 2.30%).

Wells Fargo

Wells Fargo & Co. (NYSE: WFC) stock has risen by about 26.5% over the past 12 months, after closing out 2020 down nearly 42%. As recently as October 28, the shares traded down more than 66%.

Even though the bank had exposure to the Archegos Capital Management implosion, Wells Fargo said late last month that it had been able to unwind its position without taking a loss (Goldman Sachs also called its loss related to Archegos “immaterial”). The albatross around Wells Fargo’s neck is the continuing regulatory cap on the bank’s assets imposed by the Fed. It gained a little slack last month, but reputational risk continues to plague the bank three years after a series of scandals that included creating fake customer accounts.
Analysts have a $43.74 consensus price target on Wells Fargo’s stock, with shares trading currently at around $40.70, implying a potential upside of about 7.5%. At the high price target of $65, the potential upside on the stock is around 62%.

The big bank is expected to report first-quarter EPS of $0.69 (up from $0.01 a year ago) on revenue of $17.5 billion (down 1.2% year over year). For the second quarter, analysts estimate EPS of $0.74, up from a loss per share of $0.66 last year, on revenue of $17.31 billion (down 2.9% year over year). For the 2021 fiscal year, the current estimates call for EPS of $2.93 and revenue of $69.4 billion.
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The stock currently trades at around 14.5 times expected 2021 EPS, 12.1 times estimated 2022 EPS and 10.3 times estimated 2023 earnings. The stock’s 52-week range is $20.76 to $41.54. Wells Fargo pays an annual dividend of $0.40 (yield of 0.99%).

Bed, Bath & Beyond

Specialty retailer Bed, Bath & Beyond Inc. (NASDAQ: BBBY) has added nearly 440% to its share price over the past 12 months, including a spike of nearly twice that amount in late January, when the company’s stock grabbed attention as a meme stock and soared to a high of $53.90. Last month the company hired two more executives charged with driving growth in the company’s $3 billion digital business, one from Wayfair and the other from Walmart.

Most analysts (15 of 23) rate Bed, Bath & Beyond stock as a Hold, and only one rates the stock a Buy, while seven rate the shares at Underperform and three rate the shares as Sell. The stock already trades above its consensus price target of $27.96.

Analysts expect the company to post EPS for its fourth fiscal quarter of $0.31 (down 31% year over year) on sales of $2.63 billion (down 15.5% of last year’s actual sales). For the fiscal year that ended in February, analysts expect the company to report a loss per share of $1.09 compared with EPS of $0.46 in fiscal 2020. Sales are forecast to drop 16.8% to $9.28 billion.

At a recent price of around $30.10, the stock traded at 23.7 times expected 2022 EPS and 14.8 times expected 2023 earnings. The stock’s 52-week range is $4.32 to $53.90, and the company pays an annual dividend of $0.68 (yield of 17.94%).

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